The 5 most important documents for your business to maintain

Maintaining important business documents can help protect you and your business as your company grows. Here are 5 documents you need to know.

Even the most modern, paperless office still runs on documents. Arguably, a business is as defined by documents — digital or printed — as it is by the products it designs and sells.

While documents like reliable sales contracts and consistent, fair employment contracts may dominate day-to-day affairs, they're not the most fundamental texts for every company. Read on to learn about the five most important business documents to develop and store.

5 vital documents to protect the future of your business

1. A well-crafted privacy policy

Any sale or basic customer inquiry puts businesses directly in contact with personally identifiable client information. A responsible business should have a clearly stated and carefully followed privacy policy that speaks to how, when and why that information will be used, how it will be protected and how customers can amend or scrub the data.

This diligence is more than simply best practice — it's increasingly necessary from a legal perspective. Although federal privacy standards in the United States are still fairly relaxed, both the European Union and China have significant policies in place — and their respective regulatory agencies issue substantial fines for noncompliance. In the US, the California Consumer Privacy Act 2018 protects citizens of the country's most populous state and provides a template for future domestic regulations.

Long story short: Don't get caught without a compatible policy. Bonus idea: make it appealing to read.

2. Documenting employee transitions from day one

It's not uncommon for growing businesses to see key employees come and go. When an early-stage startup focuses 100 percent of its energy on developing a viable business plan, it's easy to play fast and loose with details.

But if the company does well, those early-stage collaborators may come back to haunt you and create years of legal headaches. That's why it's vitally important to document every employee's comings and goings, even (especially!) when you're in the phase of late-night planning sessions over pizza boxes or takeout pho. When an employee — no matter how loosely defined their title — exits the company, document it as carefully as you would the end of any contract. For example, if you started a business with someone understanding that you would be partners and the relationship doesn't last, document the split even if the company had no customers or products at the time of the employee's departure.

3. Confidentiality agreements

Businesses are inevitably going to have secrets. They may not all be combination-to-the-crown-jewels-level secrets, but any company looking for a competitive edge has the information it doesn't want to be spread around. This is why your business needs documents that make it clear to the signer exactly what they are keeping secret, how they are expected to protect the information and the consequences for breaking confidentiality.

When storing these agreements and pacts, don't just shove them into a single folder and forget about them. Instead, organize and track the arrangements so you know exactly who knows which of your secrets. That way, you know who to notify if your private plans change — or the employee to track down if it seems like somebody's blabbing.

4. A comprehensive information management plan

It's easier than ever to purchase cloud storage, utilize business apps or dump gigabytes of data into a tiny memory card. But if you run your business that way, before long you won't have a handle on your data.

If you can't find answers when you're really compelled to — either by a legal challenge or a big-time opportunity that requires you to have all your ducks in a row — you'll have to bring in costly discovery experts to track down every data point. So, it's a good idea to keep a living document that maps out the ways and places your organization stores and shares information. Make sure the map includes the type of security layers on each location, along with known risks. (Just going through this process might force you to reevaluate how you secure your business, and that's a good thing.)

5. A continuity plan

Every business has bad days and even terrible, punch-in-the-gut days. The former you can shake off with a good night's rest. The latter might require a quarter or two of old-fashioned hard work to overcome.

But what about a devastating crisis or a traumatic disruption that costs you not just money and customers, but also leaders, facilities, inventory or infrastructure? These scenarios often occur with little to no warning and can immediately threaten your business's future.

In an emergency, you need a plan that keeps your business operating. By the time this becomes evident, however, it may be too late to start devising one. So, plan and set up the hierarchies, standing orders and emergency procedures to help your business weather various crises — even the most unexpected and unimaginable.

This process may sound complicated, but there are accepted protocols for dealing with such challenges. The Department of Homeland Security, for instance, offers a very clear, step-by-step guide that concisely breaks down the need for a continuity plan and how to create one.

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In today's fast-paced digital era, it may seem that documentation is an antiquated practice. But the truth is that the line between business success and failure is often paper thin — and the documents outlined above might be make or break for your business.

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